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bne April 2022 Companies & Markets I 19
bne:Green
Scramble to replace Russian gas endangers climate change targets
Richard Lockhart in Edinburgh
Russia’s invasion of Ukraine has pushed the questions of decarbonisation and energy security up to the top of the political agenda as governments scramble to find alternatives to Russian oil and gas.
The immediate reaction in the EU has been to accelerate
the energy transition by strengthening and extending its commitment to the Green Deal and to turn away from Russian gas and oil in a rapid U-turn that could not have been expected before the war began on February 24.
The energy price shocks caused by the war – wholesale gas prices have risen by 10 times – have concentrated minds on how to secure alternative energy supplies and how to replace imports of Russian oil and gas.
The EU imports 90% of its gas consumption, with Russia providing around 45% of those imports, in varying levels across Member States. Russia also accounts for around 25% of oil imports and 45% of coal imports.
Although the EU has stepped up its commitments to its Green Deal targets, it has warned that these will come at considerable costs in terms of retail energy prices for consumers.
Meanwhile, the immediate move away from Russian gas has caused governments to look at nuclear power and LNG imports as one long-term solution alongside renewables. Yet some generators have not ruled out using coal as a short-term fix
to fill energy gaps.
The race to find alternatives to Russian gas runs the risk of failing to meet, or delaying, the COP26 climate change goals, particularly net zero by 2050 and global warming limits.
Utter madness
UN Secretary-General António Guterres warned on March 21 that such short-term measures were “madness,” and could threaten the 1.5C target for global warming agreed at COP26, as governments scramble to secure energy supplies in the face of a 10-fold rise in gas prices and a doubling in oil prices.
The Paris Agreement's commitment to limit global warming to 1.5C is on “life support,” he warned.
“As major economies pursue an ‘all-of-the-above’ strategy to replace Russian fossil fuels, short-term measures might create
long-term fossil fuel dependence and close the window to 1.5C,” he said.
“Countries could become so consumed by the immediate fossil fuel supply gap that they neglect or knee-cap policies to cut fossil fuel use,” he went on. “This is madness. Addiction to fossil fuels is mutually assured destruction.”
The UN secretary-general said in a tweet that the war in Ukraine also showed how the global addiction to fossil fuels is placing energy security, climate action & the entire global economy at the mercy of geopolitics.
Global emissions rose by 6% in 2021 to a record high of 36.3bn, more than offsetting the pandemic-induced decline seen in 2020, the International Energy Agency (IEA) said.
Guterres warned: “If we continue with more of the same, we can kiss 1.5C goodbye. Even 2C may be out of reach. That would be catastrophe.”
Immediate concerns
As the war began on February 24, there were immediate concerns that it could derail the fight against global warming and climate change as energy prices soared.
Andrew Freedman of the think-tank Axios warned that the Paris Agreement temperature target was perilously close to slipping out of reach, as climate change was no longer top of the political agenda.
US climate envoy John Kerry also warned before war broke out that the world was losing focus on emissions and
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